PORTLAND, Ore. 
Supervalu Inc. said Thursday that its fourth-quarter net income fell 2 percent, but it beat expectations, which investors took as a sign that the grocer's turnaround efforts may be paying off.

The company, which operates the Albertsons, Jewel-Osco and Save-A-Lot chains, also forecast 2012 earnings in line with Wall Street's expectations.

Supervalu was an industry laggard for some time. It launched a turnaround plan more than a year ago - bringing in new management, cutting costs, lowering debt and closing stores. But it saw little impact until now.

The company said it earned $95 million, or 44 cents per share, for the fourth quarter, down from $97 million, or 46 cents per share, a year earlier.

The results included one-time charges of 31 cents per share tied to store closings, employee-related costs and the declining value of Supervalu's assets. Selling its supply chain management business, Total Logistic Control, more than offset those charges.

Analysts surveyed by FactSet expected the company to report adjusted earnings of 33 cents per share.

Supervalu leaders said cutting costs and better managing promotions significantly improved the company's profit margins during the period. Its primary challenge now is to improve its soft sales.

Supervalu's revenue fell 6 percent to $8.66 billion, missing Wall Street's estimate of $8.73 billion. And revenue at stores open at least a year dropped 5 percent. This figure is a key gauge of a retailer's health because it excludes revenue from stores that opened or closed during the year.

Herkert called the sales figures disappointing and said addressing this erosion is his highest priority.

Supervalu has emphasized lower prices in all its stores and focused more on its Save-A-Lot chain to draw today's cost-conscious consumers. The company said new efforts in stores - better ordering, pricing and improved promotions - also will improve customers' shopping experience.

Supervalu now expects to earn $1.20 to $1.40 per share for its 2012 fiscal year; analysts expected $1.27, according to FactSet.

For the year, Supervalu lost $1.51 billion, or $7.13 per share. That compares with earnings of $393 million, or $1.85 per share, the previous fiscal year. Excluding one-time items, the company's earnings fell to $1.39 per share from $2.03 per share.

Revenue for the year fell 8 percent to $37.53 billion.

Shares of Supervalu rose $1.46 - more than 16 percent - to $10.54 in midday trading. The company's shares have traded between $7.06 and $17.47 in the past 52 weeks.

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AP Retail Writer Michelle Chapman contributed to this report from New York.